tv Closing Bell CNBC June 5, 2014 3:00pm-5:01pm EDT
see you tomorrow. hi, everybody. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i'm scott wapner at cnbc headquarters in today for bill fiscal cli g griffith. a bullish hedge fund manager makes a bullish comment , david tepper saying he's no longer looking for a sell-off. market takes off just before noon. got to over a triple-digit gain. the dow and s&p barreling to new highs. we have an all-star lineup to sort this all out. >> yes, we do. we also have a first on cnbc interview with medical device maker medtronic.
the company's ceo speaks to a report he's looking to take over a london-based company. we will ask the ceo coming up. the day of reckoning arrives at general motors. 15 heads roll for the recall controversy but no one at the very top taking the fall. can gm now put the issue behind it? we'll have the latest and hear from a consultant for the company, as well as lawyer for the plaintiffs who's still not satisfied. take a look at markets here heading into the close, scott. welcome to the hour where we seem to keep setting these new record highs. lately it's been the s&p. today it looks like the dow is going to join it, it is up 95 points at the moment. 1,6 1,682, a new high. the nasdaq also having a reasonably strong day. adding 43 points or 1%. finally the s&p 500 already been setting a string of record highs. looks like it could do it again today adding almost 12, 1,939 is
the level there. >> joining our "closing bell" exchange today, rich peterson, jeff layman, dick burress, steve leisman and rick santelli as well. dick, i'll go to you first. why couldn't draghi do what tepper did? what happened? >> was that question for me? >> yes, it was. >> well, i think what he's doing is not enough, frankly. but i do think that the central banks around the world are setting things up for an epic battle between interest rates and corporate earnings around the world. i think ultimately corporate earnings will win that battle. bonds will go down. stocks may have a correction as interest rates start to rise. but ultimately corporate earnings will surprise the up side and stocks will make new highs in to next year.
>> you think corporate earnings are going to surprise to the up side like they did in the first quarter? rich peterson, what would that require. >> again, what we're seeing for the second quarter looking for a 7.1% gain -- >> 7.1% year on year. >> for second year. for full year looking at over 7%. that's going to increase in the third quarter to 9% and double digits by the final quarter of this year. corporations are doing all stops necessary to drive the bottom line. but whether that's doing buybacks or doing acquisitions or that's doing corporate mergers. any means necessary to beat those numbers. >> are we going to see top line growth? that's what will lead the markets even higher than where we are now. not just david tepper's comments or the ecb's comments on negative rates and depositories. i think top line growth will spur the markets, may spur the markets even higher. >> steve leisman, i'll go to you. should the market be disappointed in anything that
draghi delivered? he shot a lot of bullets today. so he didn't pull out the bazooka. maybe he wants to keep it in his back pocket in case he needs it. >> i think he kind of overpromised and made a nebulous delivery, scott. we're really not quite sure about this one thing he has, as asset-backed securities. they have to kind of create the market before they can go in and purchase assets in it. it seemed like he said qe, but the market is kind of squish shi on that because they were kind of doing it before. looks like they sort of made it official. he underdelivered when it came to the interest rate. i think the package overall surprised to the up side but it is a matter of execution and i think the market wants to see that to believe it. >> maybe it is the tepper thing that's driving -- >> this whole tepper thing is silly. >> why? >> well first of all, i got a problem with what he said before. what was he concerned about before? was there any doubt that the eu the eurozone folks were going to deliver -- >> they failed to deliver for two years.
>> he was nervous about the ukraine elections. he was nervous that draghi had talked the talk so many times, was he going to walk the walk? was the u.s. economy going to start picking up? he says some of his fears have been alleviated to some extent. >> i think some people took some of david's money here and i like david, especially because is he a member of the follicically challenged. >> nivs didn't mean bearish. >> we've talked about this on this show with kate kelly and everybody else who's been through here talking to guys who run money who have been consistently bearish. jeff, i wonder if it is too early to call this to some extent capitulation by the bears. do you think when tepper throws in the towel on that quasi bearish call that others will follow? >> could be a sign. i think there's been a constant stream of things to worry about
in the recent year, last five years for that matter. you look underlying what's going on in the economy, unemployment coming down, household net worth at a new record high, i'm pretty optimistic about not only revenue but also earnings trends improving going forward. >> are your clients getting back into this market if they've been out of it into stocks? >> our clients have been in and continue to get back in, absolutely, and feel pretty good about it. not in the context of over exuberance. it is really more just good exposure to the markets at reasonable valuation levels. >> maybe they don't want to miss out. largest proliferation of money still resides in the bond market right now. $1.2 trillion of fixed income bond money that was pumped into the market since 2006. a lot of it still resides there. we talked about this great rotation last year. it never happened. it hasn't happened yet so there is still a lot of cash sitting on the sidelines, perhaps alluding to the fact -- >> you think it happens now,
rick santelli? >> no, i don't think it ever happens. >> get ready. >> i don't. i think at this point, five years after a crisis, it seems to me that those have carved out where they want to be invested and where they don't. i think we make a couple of errors though to make an assumption that just because there are investors that have diversified and stuck with the fixed income sovereign market like treasuries and bunds doesn't mean they don't have a presence in the equity markets. as a matter of fact, it is the hedge that keeps on giving. i remember in january, on this show, when questioned about who in their right mind would buy a fixed income product, at 3%, i remember saying anybody who's bearish. equities. you've now made money in equities and you'remakering money on the hedge. >> rick, i just got a question to for you. what does draghi have to do now to trash this currency. had he a four-point plan today that everybody said should have led to a weaker euro. he can't get there.
does very to come out and say the euro stinks? >> anything he's doing now could potentially fuel germany to perform even better. rick, isn't that the case? >> really what we're arguing about is the reason i done believe that the euro is going to exist in its current form several years down the road. i think that the countries that are having a problem wouldn't have a problem if they had their own currency. and the strength in the euro is more of a proxy dinar that the germans could live with but the southern europeans can't and that's the flaw in the structure and i think it will come back to haunt them. and i'll take it a step farther. i don't know that the ecb truly has the authority to go directly into the securities market so that's why i done think that bazooka is ever going to get fired. >> so we are looking at an s&p 500 that's at 1,940. the dow, we keep hitting these new highs every day, rich. are the worst scenarios now off the table? i mean we don't have to worry about europe. do we?
do we have to worry about china? what's the big upset that's out there that we're not focusing on? >> on one hand, we call it the goldilocks movement. elvis costello markets in other states. by that i mean pump it up. the fact is tomorrow we get the jobs numbers. if you have over 200,000 new jobs in the four consecutive months of over 200,000, we haven't seen that consecutive movement since 1999. we saw better car sales in may. 16 million. >> is it all a credit boom? is it all a credit bubble? do people watching this show need to worry if they get in right now, yeah, they're riding a wave but it is going to come crashing down. >> look at valuations. for 2015 earnings per share of $131 through the s&p 500. 12-month target for june of 2015, 2,100. >> rich, the economic thesis for this year sounds like it is the
same as the stock thesis. it is not a gangbusters, things are going to go great. it is the absence of headwinds, the absence of things that have held us back in the past is the reason why the economists had become more bullish on this year. sounds like that translates directly -- it's not i'm so excited about it, i'm just not all that depressed about it. >> we lost like $10 trillion to the sidelines since march of 2009. in march 2009 the valuation of the s&p 500 was $7 trillion. now we're over $17 trillion. those who nay sayed the dow at 1000, 1,200, 1,500, at one point normalization will take hold. we'll meet reality but when that comes we don't know. >> rick santelli, what potentially breaks the bond markets back? i mean is it a big print tomorrow in the jobs number? is it a dow that goes over 17,000 possibly tomorrow if you get a blowout number?
what is it? >> well, i think obviously if the dow gets to 17,000 or 18,000, that that potentially will put some upward pressure on interest rates. that makes sense. but i truly think that there's two big issues that are keeping rates down. one is not a sustainable economy at the backbone of the united states of america right now, even though it has glimmers of hope. and i think the relative spread trade to some of the rates in europe like the spanish, the italian, the french rate, just auger that it is very difficult to think that i'm going to sell our rate when their rate is lower for really a lesser credit. >> there's not enough debt out there. >> for our viewers, can you just give -- the places you see an opportunity in this market today. >> i think that there's still good value in u.s. stocks, and particularly finding high-dividend payers. we've been buying gm lately. we think the recall issues will
pass and that stock's got some good potential over the next 18 months. we are still pretty fond of emerging markets. we've been adding money because we think the valuation will take care of us over the long haul. >> good to hear from everybody this hour. so much going on today. >> thanks. breaking news now in netflix. julia boorstin joins us with the details. >> netflix is firing back at verizon. just sent netflix a cease and desist letter trying to get netflix to stop blaming verizon for slow streaming or buffering for its consumers. netflix says this is about consumers not getting what they paid for from their broadband provider. we are trying to provide more trance parn pay just like we do with the isp speed index and verizon is trying to shut down that discussion. this battle, this he said/she said back and forth between netflix and verizon is heating up ahead of the launch of a new netflix show. all 13 episodes of orange is the new black hitting tomorrow which
could bring more slow speeds and buffering. >> wow. wow. julia, thank you. nearly 45 minutes before the bell rings to close this day on the street. dow right now is just off the highs of the day. still having a good one, almost up triple digits now, 16,832. central bank delivering some unprecedented measures to stimulate the economy but the question is whether it will help or hurt u.s. companies to have a lot of european exposure. seema mody will look next at names you need to know. gotham asset management joel greenblatt whose investment philosophy has been compared to warren buffett's gives his take on the markets. which stocks does he says you need to own for the long haul. general motors' ceo firing 15 people stemming from the recalls. no one at the very top got the ax though. we'll get reaction from the lead attorney in a class action suit against gm coming up along with
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welcome back. how about the dow today just shy of 16,840. 16,833 is a gain of nearly 100 points. really spurred earlier in the day when our own kate kelly talked to david tepper. he told her that most of his fears have been alleviated to a certain extent. remember it was out in las vegas at the salt conference. not that long ago where he said it was nervous time. was looking for europe to do something. had questions about the ukrainian elections, also what bs going on in our own economy, today feeling a little bit better. he was bullish then, but perhaps today he is feeling even a little more bullish about the markets given the events we've seen and the markets are in the green across the board. they are. another banner day looks like. dominic chu is tracking the markets. >> green across the board. joy global leads the percentage
gainers on the s&p 500. this after the mining economicsmaker posted better than expected second quarter profits. joy global session highs up 6.5%. then there's siena moving higher posting second quarter earnings and sales that beat wall street forecasts. up 18% on the day. barnes & noble gaining ground on news that its teaming up with samsung to develop nook tablet computers allowing it to focus more on software than the hardware side of the business. barnes & noble up 3% on that bit of news. we're going to end with smith and nephew on the medical device side which is moving lower, down by about 6%. wells fargo said it is unlikely that medtronic will make a bid for the british medical devicemaker after this analysts spoke with medtronics management at the company's investor days. in a programming note, medtro c medtronic's ceo will be on live "closing bell" in just a few moments right here on cnbc.
so you'll definitely want to stay tuned for that interview. europe in the meantime a focal point for investors at mario draghi unveiled new plans to try to jump-start the economy. will it be a source of strength or weakness? >> seema mody joins us now with this special report. >> that's right. the answer really depends on the companies' products and services. european travel market, for example, has been recovering and that's been a positive for online travel player priceline. analysts say going forward growth from bookings.com, its european hotel booking site, will continue to provide a lift to earnings. a different story though for garman given its strong consumer business, stiff competition from >> tom:. they expect europe to be a headwind. while harmon international recently raised its forecast, the reason there, stronger demand for its audio systems from european luxury carmakers. auto desk while the rise in construction in europe has been
a boon for the company because it focuses on architectural design, ubs says expect europe to be a headwind for the company because these new contracts won't be recognized in the near term. when it comes to being a vaccen. given their focus on cost cutting issues, they are faring well. some companies are being hurt by the weak european economy, others are seeing it as an opportunity. back to you guys. >> seem kl a, thank you. 40 minutes until the close. so far, universal, the overwhelming message, however you want to put it, is apparently positive in response to what the european central bank has done today. s&p 500 up almost 12 -- i'm sorry, 1,939 the level there. those will be record highs if we stay at these levels.
another week, another u.s. company mulling a foreign takeover to minimize tax payments to uncle sam. we'll ask medtronic's ceo what's behind the reports he'll be bidding for uk-based smith&nephew. what's next for general motors? we'll speak with a lead attorney in a class action lawsuit against the auto giant later on the "closing bell." re the think. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours.
welcome back. we're a little more than half-an-hour from medical devicemaker medtronic ringing the closing bell here at the stock exchange as the company holds its investors conference here in new york, scott. plus, the company. has been in the news this week reportedly considering a takeover of london-based smith&nephew. let's bring in medtronic's ceo, omar ishrak. great to speak to you this afternoon. any truth to this talk of a potential deal with smith and nephew? >> you know, it is a long-standing policy not to comment on any speculation of the shorts. i'd rather talk about other exciting things. >> the analyst community is sort of mulling how this would work out or why you would even potentially be interested in such a thing. would you do a deal with somebody outside this country simply for tax reasons? >> look, again, i don't want to comment on any speculation. what i will say is our general
strategy towards m and a is first around business strategy itself. we look at what the strategic elements are, then optimize a structure after we settled on whether those strategic elements are attractive enough or not for us to pursue anything in that space. >> it's interesting, omar, there are analysts who point out that your effective tax rate for the fiscal -- full year '14 so far is 20%. smith and nephew's is 29% because it is in the markets where they do business. perhaps the reaction in the market today, their shares are down considerably, yours are down a little bit as well, people are waking up to realize that actually if you were to purely look at the financials that might not and motivating factor. medtronic, you've had 16 acquisitions in the last five years. you're clearly building yourself into the kind of global devicemaker. why not look at an opportunity to expand strategically into an area like orthopedics or spinal, some of the strength of smith and nephew? >> i think from a strategy perspective, again, we look at a
strategy realistically. spinal is one component of our overall business. there are several other components. sure, anything that enhances spine or any of the other divisions are kpcompanies that look for in terms of strategic fit. >> are we in an acquire-or-die environment? and is this motivated by cost pressures across the industry? does it have to do with obamacare or some of the broader transformations happening in hospitals today? >> i don't think we are at all in an acquire-or-die mode. we have a strong operating business. we know how to grow the business organically. we've got heavy investment in r & d for which we are getting returns. we have plenty of organic opportunity in emerging markets. i think health care is an industry and opportunity that's undeniably big both from a business perspective and as a societal need. so acquisitions are there, but at the right time and place. >> what do you make though of the acquisitions and even talk of such in the space of health care devices and -- et cetera.
that's pfizer, astrazeneca talking, valiant, allergan, rumors about you, why is all this happening now in the space? >> i think, look. there's unquestionably a need for tax reform in the u.s. that has been talked about. tax rates in the u.s. compared to other countries are higher. and there is a lot of companies, like ourselves, with cash, which is strapped outside the u.s. that obviously draws all kinds of speculation. but we look at strategy first. we have a perfectly sound and exciting organic strategy which we detailed today and that's our focus. beyond that, we optimize the structure once we get our strategy in place for any particular transaction. >> omar, i'm curious to talk a little bit about the cash that's overseas. a lot of people think about the tech companies. obviously now the
pharmaceuticals and other corporate giants are coming to mind. something like $13 billion or $14 billion in cash is overseas. yesterday we had an analyst on the show pounding the table on how people need to make more of an effort to spend, produce, hire here in this country. what difference does it make to you as a country to have $13 billion of that $14 billion overseas? is that materially affecting the kind of production and jobs it would otherwise be here in the u.s.? >> well, sure. if you had access to that cash in a completely free fashion, then there are investments in the u.s. that we would make in terms of technology which right now we would still make if it is compelling enough but obviously the equation is slightly different. we've got to look at every case on its own merits. >> sir, i'd like to ask you about this humana rico claim over your bone drug, allegedly conspiring with physicians. a spokesperson for your company was out today flat-out rejecting that. i'd like to hear it with respect from you, the ceo.
what is the story here? >> well, indeed i'd like to reject that. look, we went on the market with an approved product whose safety and efficacy has been established by the fda during the approval period. that's what we stand by and we stand by its safety profile and we he do not have any practice of any dealings with physicians that are inappropriate. and so we are quite convinced and certain that we're clear about this. >> the $210 million that the senate report identifies here and that humana is taking issue with, are you saying that was paid to physicians only for consulting services? >> they were paid on a completely legal basis for which there was a basis for the value they were giving us. as clear as that. >> omar, before we let you go, i want to go back to the issue you just raised about what you would do in this country if your cash
were here. you mentioned looking at some technology. can you just explain that? what do you mean by that? >> well, you know, first we spend a lot in r & d. we've got a proud history of creating technology organically. we also recognize that we don't have a lock on all inventions in the world. so i'm sure there are lots of innovative companies in the u.s. who have exciting technology and to the degree that we have more cash, then if it made sense in every other way, we would be more able to invest in those than we are today. as simple as that. >> is 3-d printing in the future? >> i'm sure. i'm sure. and all kinds of different -- when, i don't know. but certainly in the future that's going to happen. >> it is all happening so much sooner than i think we ever expected. but thank you for being here, omar ishrak, the ceo of a company that's been so inquisitive and involved in a number of transformations lately. we've got break news now on
the department's veterans affairs. john harwood joins us from washington. what's the latest? >> reporter: a breakthrough in a bipartisan way in the senate on legislation that may help the new secretary once we get one, a permanent secretary, fix some of these problems with wait times. it encompasses both major approaches talked about in terms of legislative fixes. one, expand the authority to the va to fire elements of the the bureaucracy that they think have been performing poorly. civil service protections have made that difficult so eric shinseki, who is leaving as the director -- or has left as the director -- found it very difficult to replace people. this senate version of the bill co-sponsored by bernie sanders, democrat, and john mccain, provides a 21-day appeal period. that's what distinguishes it from the version in the house which allows firing authority but doesn't have that appeal process. so it will be difficult to go down in the house -- except the house veterans affairs chairman
has been part of these discussions that produced the bipartisan breakthrough and it includes his proposal to provide choice for veterans if you're experiencing a long wait time to go to other facilities as if you were a medicare patient and get treated if you can't get treated at the va. so it addresses both of those issues. the sanders office told me they hope for a vote next week in the senate. a lot of members have left to go to the normandy d-day celebrations. but if that happens, if we get it through the senate next week, it probably should move relatively quickly in the house, guys. >> all right. a fix, perhaps, at least an attempt to fix that situation here, john. thank you. we've got about 30 minutes to go to the close. markets are still having a pretty positive session. the dow is up 88 points ppts s&p is adding 11 and the nasdaq 40. for the dow and s&p that would mean new closing highs. >> value investor joel greenblatt is up next with his
take on the markets. find out if he is a bull or a bear these days. plus, he'll name companies he says you need to own in the long run. plus he's shorting some companies as well. find out which ones. robert wolf giving me his take on economy and markets ahead of tomorrow's dejobs report. three-time appointee of president obama has a unique perspective. back in a moment. over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability.
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comcast business built for business. dow right now is above its all-time closing high. there you can see, 16,828. this on the ecb delivery day, if you will. and ahead of really tomorrow, which is the big day, and that's the jobs report. everybody's going to be focused on that. the screen may not look like it does right now tomorrow. who knows. >> you never know. 8:30 eastern is when all that fun begins. meantime, stocks are hitting all-time highs. can it last though? with us now in an exclusive interview, joel greenblatt from gotham asset management. welcome back. your whole approach is identifying most overvalid, most undervalued parts of the market. can you give us some examples of places where there is still value and opportunity? >> sure. way we do things in general is especially for our long/short
mutual funds, we look at the 2,000 largest companies in the u.s. and rank them on a daily basis from 1 to 2,000 based on their discount of our assessment of their value. prices are changing daily. we generally buy about 300 of the cheapest relative to our assessment of value and short 300 the most expensive. and we put more weight into those that are cheaper. so the first cheapest gets the biggest weight, second-cheapest gets the second-biggest weight. there are always places where there are opportunities, and it really depends on the dispersion within the market. >> today who's cheapest and who's most expense sniff. >> let's talk in broad sense. russell 1000. for instance, we've done research over the last several decades and today, based on current valuations of the russell 1000s -- stock to 1 to 1000 in market cap in the u.s. -- they're in around the 37th percentile towards expensive over the last several
decades, meaning it's been cheaper 63% of the time and more expensive 37% of the time. when it's been here in the past, the russell 1000, similar to the s&p 500, has been up between 6% and 11% over the next year, on average. big difference for the small caps. the small cap stocks are in the roughly fifth percentile towards expensive, meaning it's been cheaper 95% of the time over the last several decades. russell 2000, stock 1 tlhrough how to in market cap. obviously large caps are cheaper, though they're not cheap, they're not super expensive. but small caps are very expensive. the indexes and much more expensive than large caps. the market's gone straight up for five years so you would think the large caps are more expensive than i'm saying. so if you look at the equally weighted russell 1000 index as
opposed to market cap weighted, that's in the 14th percentile. that has been cheaper 86% of the time. stock pickers will have a tough time meeting the market cap indexes. >> i'm just seeing a note, couple of longs you are interested in, energizer, lockheed martin, proctor and gam. balance, shorts, carnival, salesforce.com. >> what those stocks have in common, is ones we own, people don't like them. energizer, sales aren't growing. they are actually shrinking a little but they're splitting between their battery division and their personal care division. so management cares. they're earning huge cash flows, huge returns on capital. same for lockheed martin. it is obvious why people don't like defense contractors. we're sort of winding down. but this is a great technology company. they're always coming up with new technologies and you are getting it at a very bargain price. procter & gamble is just an example after very high-quality company that earnst 50% returns
on tangible capital. just an excellent business at a good enough price. on the short side, s carnival and salesforce are all eating through cash, all destroying capital and they invest, at least the way we look at it. stratasys is selling at three times capital. there is going to be a lot of competition there and seven times sales is a high price to pay for that especially if they haven't earned cash yet. salesforce is the same thing. they are getting some of their growth through acquisitions and perhaps that's not sustainable at seven times sales. that's also expensive. carnival, it's you need a lot of assets. you need to buy big ships. there are people throwing up. that's what people know about. but what they don't know about is they spend a lot of money to build these ships an they don't make a very good return on them.
>> joel quarterback , if i'm co past, you've said people should own ten or fewer stocks to cut down on their risk. in a market described as a stock picker's market and one fairly respected hedge fund managers have called fairly valued, how does your strategy play in to that and is it more difficult to find those stocks in the current environment? >> okay. well, that's a great question. number one, there are a lot of different ways to make money and we have run strategies in the past that have been very concentrated. in other words, put all your eggs in one basket and watch that basket. right now we value companies the same way we always have but we run long/short mutual fund as a private funds that really play the averages, meaning we buy roughly 300 stocks on the long side and 300 on the short side. we are very good at valuing
them. we buy them at a discount and we are good at it so we buy a lot of them, we don't buy just ten. >> what about for the retail investor who is watching you who maybe doesn't have the wherewithal to buy hundreds of stocks? what's the best strategy in the current environment for them? >> i have a hunch i know what the answer is. >> well, like i said, we run long/short mutual funds called the gotham funds. and we design them so that people can take advantage of a strategy like this. you're right, it is hard for individuals to go buy hundreds of stocks and -- effectively. >> are you having trouble attract being the retail guy to effectively the stock market right now with this batch of mutual funds? >> well, it is actually -- alternative mutual funds are a new area, meaning these are sort of putting hedge fund strategies in mutual funds form. we've sort of -- i think it is very attractive to retailers. we were under a billion dollars in assets in these particular mutual funds on january 1.
now we just passed 3 billion in a matter of a few months. it is a very, very hot area. i'd like to say we're great and that's why people are coming and our returns have been good, but i think it is more like we're just -- people are hungry for this type of opportunity. >> that's pretty telling, joel. thank you for being here. a fascinating window on one of the more popular ways to invest these days. 15 minutes before the closing bell. dow holding on to its gains of 90 points. s&p 500 having a good day as well, up .66%. how much do you really need to retire comfortably? in the next hour of the show, you better start saving now if the pros are right. general motors ceo firing 15 in the recall issue leading to 13 deaths. coming up. (vo) watching. waiting.
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♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ welcome back. here's a look at where we stand. i'm eyeing those record highs because look, with a 95-point rally, looks like it is going to be one for the dow jones industrial average and not just the s&p as it has been the case so often of late. >> courtney reagan's been covering the action all day.
court, an interesting day. expectations were really high going into to the ecb meeting. maybe not as much happened at least from a market standpoint than perhaps people were looking for. then david tepper comes to the rescue today. >> yeah. a lot of interesting things going on. the ecb made some announcements that were maybe for the most part expected and somewhat priced in. but we did see some action in the emerging market etfs, particularly turkey, indonesia, as well as india. remember, when we see this action out of the ecb, there is the higher potential for capital into these countries. we did see the euro dip down before then trending higher. then stocks of course reacted and then sort of faltered off. then we had tepper come in. while there was doubt about the ecb, there was also some doubt about what tepper had to say. just a couple weeks ago he was saying he was a little concerned about what was going on in the equity markets and now changed his tune.
some people say maybe he's just making these comments so that he can sell. there's also some caution both from the ecb as well as from tepper. >> all right. court, we'll talk to you soon. >> okay. >> about ten minutes to go before the bell rings on wall street. dow and s&p having a pretty good day. kelly, ahead of tomorrow's big jobs report. and coming up in the next hour of the show, by the way, celebrity chef and restaurant king bobby flay is here. he's going to weigh in on the economy, what he's seeing in terms of consumer spending, whether it is a big time for good eats across the country. yes, bobby flay is going to be a special edition to our "closing bell" panel in the next hour. don't go anywhere.
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general feeling that we've worked through some of the main worry spots in the market. is it time for macro bears to throw in the towel? >> i think so. i think what we heard today from the ecb is really important. eegz credit conditions and i think a vote of confidence that they're there to support the economy. i think people are finally coming to terms that the global economy is recovering. today's announcement gives us more confidence and a smoother path for a deeper recovery in europe this year. >> what's your year-end price target for equities? >> we started the year saying 10% to 12% for the u.s. you think where we're up today about 6% is where we want to be. europe we started a little higher. we looked for 12% to 14% there because we thought the earnings outlook was better. again, europe is up about 8%. given that we're in june we are right on track. >> we're pretty enthusiastic about what we see in the market.
valuations are at a level where we see potentially more value in other areas. certainly some sectors and some countries around the world that look interesting. but overall we see a very positive industrial environment bodes very well for stocks. >> you like japan better than the u.s. or just part of where you are allocating money? >> an excellent question. we are really bottoms-up value investors and we see very positive economic developments in the u.s. but as value buyers we are looking across the board on industries and sectors and countries to see where there is really value. if you look at the japanese market, two key attributes make it attractive to us. valuations are quite low rel to the relative to the u.s. and other markets. but more important than the pe ratio is significant structural reforms and pro-growth initiatives that we see happening over the next six months. on the growth initiative side we're looking at what we think would be a significant decrease
in corporate tax rats db rates. corporate reforms. people need to poe cuss on what's happening on the corporate governance stid in japan related to a new index called the nikkei 400 which is only going to allow high-level corporate governance companies in which we think will be a big impact on the overall market which provides us the belief that over the next six months this could be a very interesting place to invest. >> guys, thank you very much. next, we are back with the closing countdown. and after the bell, scott, heads rolling in motown today as gm chief fires 15 executives in response to the 13 deaths linked to a recall delay. coming up, we'll have an size ao gm. two very different takes on today's events at gm. coming up, the second hour of the "closing bell." you're watching cnbc, first in business worldwide. (mother vo) when i was pregnant
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♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ so the magic shell went back to being a...shell. get live squawks right in your trading platform with thinkorswim from td ameritrade. welcome back. it is the closing countdown time. want to show you what we're doing on wall street today. we've had a pretty good day. it's been a tale of two markets. a pre-tepper market, and a post-tepper market, if you want to call it that. the ecb did what it did. the market had kind of a ho-hum, somewhat positive reaction. after david tepper, the hedge fund manager, spoke to our own kate kelly and said that some of his concerns had been alleviated to a certain extent, you really
started to get a bid in the market. he said back at salt just a few weeks ago it was, in his words, nervous time. uncertain about what the ecb was going to do. uncertain about the ukraine elections. uncertain about the economy. feeling better today certainly about what is going on over in europe. ukraine behind us at least from the election standpoint. maybe feeling a little bit better about the economy as well. that's the picture on the street. you can see once mr. tepper made those comments just before noon, things started to take off a bit. want to show you the 10-year as well. that remains a big story. some money coming out of fixed income today, bond yields rising just a bit. let's get to our guests again. steven, to you first. i'm curious your reaction to what david tepper told our kate kelly today that maybe some reasons to be nervous have abated. >> i think definitely the reasons to be nervous have abated. there were more reasons in the first quarter with some of the data early on in january and feb was coming in weaker.
jpmorgan morgan stayed invested in equities. today sure enough, the data is getting better. come s consumer confidence, pmis. it is showing the economy is on track to recover. we expect better growth in the second half. corporations are posting record profits. m and a is really picking up. they're up 70%, 80% in the first quarter versus the first quarter last year. that's a huge vote of confidence from corporate america. >> steve lays out a pretty bullish scenarios. do you buy it? >> the move by the ecb should give more confidence of what's happening in europe. if you look at the market and you see what's happening. in the u.s. and other areas, we think that it is a pretty attractive time to be invested in equities. we would say though it is still very important to focus on valuations and given where
things right now to look around and see where the opportunities are from a valuation perspective, especially what we see, for example, in asia and in some of the other emerging markets. >> the bells are ringing, guys. just off the highs. we'll have a new closing high on the dow. kelly evans takes it over from here. the graphics are back. welcome to the "closing bell," sha the s&p, the dow jones industrial average, as we hit 4:00 here on the east coast, the dow adding 97 points, 16,834. that puts it a good 90 points above the prior closing high. remarkable. the nasdaq, 4,296. up 1% for the day. s&p 500 adding 12% to 1,940.
also a new closing high. on that note let's get right to it with today's panel. cnbc contributor peter bookmar is in the house, bobby flay, carol roth, and jon fortt. "fast money" trader brian kelly and dennis gartman. dennis, i'll start with you. look, are we seeing whether it was david tepper's comments earlier today, the behavior of markets, the decisions people are going to start to make now, a capitulation of the bears? >> well, i would hope that the bears may not be capitulating because you need bears to keep a good market going higher. there's plenty of people around who are still bearish. i think they're obviously wrong. they've been fighting that trade for a long period of time. i hope there's still bears around. i bet they didn't cover and i bet with this morning's action in the euro, first of all, and the early sort of weakness that we had, i bet the bears were actually sellers early on,
probably some ran their cover but you need bears in the market to keep the market going higher. you need shorts in a market to keep the market going higher. kelly, i doubt that they ran for cover. >> peter, are you one of them? >> unfortunately. but let me say this. according to the investors intelligence numbers on wednesday, there are no bears. and in fact, bulls have never -- have been higher once in that survey. and that was in 2004. but it was also higher than in august 1987 and october 2007. outside of a few of us, there are no bears. >> wouldn't you say we're actually more like little cubs, like soft, cute, cuddly little baby cubs? not full-on bears. obviously everyone understands what's going on with the qe. with the fed rates. now we have a party going on in europe. i don't know you can be a full-on bear in this kind of market but you could have a little cubbish quality. >> how much of a party is there going on in europe? i'm looking at a euro that
frankly, is it stronger on the day now? >> yes. it is actually up for the week. the ftse is down for the week and dax is unchanged for the week. people should have perspective on what the ecb has announced. it's contracted by a trillion oneuros over the past two years. 500 billion euros have been paid back. all the ecb is doing is essentially trying to refill some of that tank. >> i think it is ironic that the u.s. investor is so obsessed with what the ecb announced but is ignoring that the fed in two weeks will have taken away $600 billion of annualized qe and in
four months we'll be ending qe. that's not the focus. somehow the ecb is. >> bobby flay, does europe matter to your business? >> for sure. i think that we have a lot of european customers that come in to the restaurants. as long as their economy is good, they're going to spend a lot of money in my restaurants. >> that's a great point. kind of the effect we typically see with the chinese and japanese tourists who come through parts of the luxury market and pore it for you. >> everywhere in the world, whether it's eastern europe, or the south american trade. we want everybody's economy to be good so they buy lots of big wines in my restaurants. >> to be fair, the big elasticity of demand around bobby flay's food. i still think if they're going to cut back somewhere, it is not going to be on bobby. >> jon fortt, joel greenblatt was on last hour. it was fascinating to hear him talk about some of the companies he was long and short. one he mentioned short was salesforce.com. stratasys. he says these companies are burning through cash too quickly than what he tiply likes to see.
we've already seen such a correction in some of these high-flying parts of the market. what do you think happens now? >> i think the market's trying to sell. today the companies -- work day. a lot of those companies got beat down. they're at the bottom of my list on who's lost the most over the past three months. on the other hand, who's up the most over three months. you got zillow, sandisk, and apple. there is a bit of concern about the companies that don't have profits. cloud names based so much on momentum compared to some of the other stocks that actually showed some pretty good earnings. now you've got apple. i think people are realizing they're making some strong moves in the cloud. doesn't necessarily take a new kid on the block to define the cloud. i think over the rest of the year we'll maybe see a separation between the real innovators in cloud and some
that aren't so much. salesforce has had a good run. >> ryan kelly, where do you see risks in this market? >> the obvious risk to me is in the high-yield bond market. i think that's the area that will happen, next crisis. just not quite yet. the u.s. stock market, you can make every valuation argument. there are no bears out there. but that doesn't matter until it does. i'm not trying to be a wise guy, but this is very, very strong. >> if you were to fast forward two, three years, what do you think happens in the bond market? >> in the u.s. -- well, i think in the high-yield, the junk bond market, the problem you have is junk bonds or corporate debt have doubled and trip ld since the crisis but dealer balance sheets have been cut in half. if we even get a tiny tweak up in rates and everybody runs for the door, there's just not enough liquidity to absorb that. that's where i see risk. that's what i worry about at
night. >> what's interesting, dennis, contrast that to what the european central bank is trying to do in europe. in u.s. corporates are the biggest ones but even some of the riskier, junk rated parts of the market are able to borrow at historic lows. there is still a real wide disparity. it is unclear whether this latest round of initiatives will work. >> well, one would expect that you'll see those differentials narrow. this is what the ecb has wanted. this is what they've done. they've come in and told you that they're not going to sterilize any of their full market operations. full on-qe. i expect you'll see those differentials narrow. anybody who continues to be bearish, you got a problem. b.k. is right, it matters when it matters. if there's one thing i've learned in 40 years, that's one of the things i've had to learn. right now it doesn't matter. right now it wants to go higher.
right now yields are going down and right now stock prices are going higher. that's just the way it is. >> hold your thoughts, for a moment, everybody. there is one other story developing today. mary jo white cgave a speech containing a few surprises. bob pisani can fill us in. >> she gave a speech today and it was very interesting. she called for a comprehensive review of market structure on the way out, i did get a chance briefly to speak with her and she emphatically insists the markets are not rigged. take a listen. >> the clear message is the markets aren't rigged. we have the strongest, most resilient markets in the world. again, doesn't mean they're perfect and we obviously are constantly working on them to make them fairer and to better serve all investors and companies, trying to raise capital. >> do you think a more forceful statement would have been appropriate given the amount of coverage this man's comment that the markets were rigged got -- >> not rigged and not broken and we're trying to improve them at
all times. pretty strong statement, i think. thank you. >> get it? the market aren't rigged. get it? two issues she's very concerned about, high-frequency trading. she wants high-frequency traders to reg register. she wants to know who they are and exactly what kinds of trading they do. that registration it the first step. secondly, she wants more trading to go back to the exchanges and she wants more information on who had's trading in those dark pools. kelly, easy to call for a comprehensive review. that means a 900-page review that might take a year or two, but it is hard to actually get real reforms through. the key now is to see what kind of follow-through the s.e.c. has but it was a very broad and fairly bold speech for the s.e.c. chairman. >> bobby flay, you trust the u.s. stock market? >> do i trust it? it scares me. it scares me because we've been making a lot of money for a long time and it almost seems like it's been too easy to make money. it reminds me of many years ago,
you'd buy at the low -- buy at the low and sell at the high. and it just seems like it just keeps going up and up and up. as somebody who has very little experience as a stock picker -- >> did you spend a little time on the floor of the stock market today. >> i did. i was a clerk. but i knew nothing. >> i think you said you were like -- i've got enough of a glimpse. i know i don't want to be in this business. >> well, that's true. i'm definitely much better off in a kitchen than on the floor of the exchange, for sure. >> an interesting point, peter. i think there is a greater truth for people who say they don't trust the stock market. it is just not because of the some of the technical glitches, some of the high-frequency trading stuff we've learned over the past couple of years. there is this sense that maybe central banks around the world have maybe contributed to that maybe it is almost too easy. maybe the five-year bull run that we've had has people as much strachg their heads as the crisis that preceded it? >> we had within an eight-year span two 50% bear markets. that scared away an entire
generation of investors that are not coming back. so here they see a dramatic increase in the stock market after five years, due to central bank largess, and i think retail investors won't jump in right now. they'd rather be in fixed income which can be its own problem, but they burned a lot of people after two bear markets. >> kelly -- >> one of the things chairman white really insisted on was the market was not broken. she says she's concerned about some aspects about it but it is not broken. she pointed out several examples where investors are better off now than they were 20 or 30 years ago, that their execution costs are lower, that the time they get confirmation of trades are much lower than they were 20 years ago. in other words, overall the investors are doing better than they did 20 or 30 years ago but she wants to make sure there's not abusive elements from high-frequency trade. >> last word, b.k. >> i think that ultimately what the central banks have done, what peter bookvar is talking
about, will end badly. let's put it this way. in 300 years of central banking, they've all of a sudden figure out how to avoid a recession? if they're correct we'll never have a recession for as long as we live. i think that's kind of silly to think. >> i'm just letting the pregnant pause stand where i try to figure out how to respond to it. stay tuned for "fast money," thank you, for now, brian kelly and the rest of the crew. they'll have the ceo of spirit airlines. that interview will also be relevant in trying to figure out the general direction of where the consumer around the economy is head hadded today. general motors dismissing 15 people for their roles in the automaker's recall controversy. but internal investigation, ceo mary barra and top executives cleared of any wrongdoing. our guest plays out his case straight ahead. bobby flay will tell us how
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welcome back. we start here with an earnings alert. >> so we got a couple names that we're going to watch here. first of all, veriphone spiking after it easily beat wall street profit and sales forecast for the second quarter. the stock off its after-market highs, still up by 4%. a different story for diamond foods. it's losing and losing big, down 10% in the after-hours trade posting weaker than expected third quarter results. sales basically came in line with forecasts but in a light volume trade. talking only 9,000 shares so far. the stock is down about 13% in the trade so far. >> ouch. okay. the nasdaq outperforming the dow and s&p 500 today. it was a big day for all the exchanges though. bob pisani has the head of the nasdaq. mr. pisani? >> of course, bob griso.
a surprisingly robust speech by the s.e.c. chairwoman mary jo white. bob, your reaction to mary jo white's calls for a comprehensive review of market structure? >> i think it was a very thoughtful speech. certainly i think we're fortunate to have mary jo in the position during this period of time. and i think it speaks well for the value of transparent markets. >> she seemed to be concerned about two areas. the first one is high-frequency trading. she wants high-frequency traders to register with the s.e.c. apparently she wants to know more about who they are, what kind of trading they do. are you in favor of that idea? >> i think she's highlighting a very few that are not registered officially as a broker dealer to pull them into the broker-dealer regulatory regime is a good thing. >> concerned about the potentially disruptive effect of
high-frequency trading particularly at times of volatility in the market. she seems to want to institute some kind of speed bump for high volatility. is that a good idea and is it feasible to implement? >> i have to read the speech. i heard it firsthand. i didn't quite hear what you're saying from her speech. but i think the keep point is for a comprehensive review of market structure and i think that will speak well for lit and transparent markets. >> she seems very concerned about the high level of trading activity, almost 40% of volume, that's going into dark pools. she wants to look at who's trading in those pools, she wants more disclosure there. are you -- do you think she's basically trying to drive more volume back to the exchanges at this point? >> i wouldn't say it that way. i think when you look at the markets, people want the markets to be lit, transparent, all investors should have access to all the information at the same time. only reason somebody should be dark, right, the dark means that only a select few can see what's
going on, should be for special purpose, when you have 35% to 40% of the market, i think you truly get into dangerous ground. >> thanks for joining us on short notice. big bay down here. >> thanks to both of you bobs. general motors judismissing5 employees after an internal investigation fatally flawed ignition switches. >> reporter: hi, kelly. if you get a chance, go to the website and download this report. when you read it, you'll go, wow, are you kidding me? one conclusion by the investigative report, "gm personnel viewed the switch as a customer convenience issue. something annoying but not particularly problematic as opposed to the safety defect that it was." here's gm ceo mary barra.
>> what was found in this situation was a pattern of incompetence and neglect, repeatedly individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by the faulty ignition switch. >> what's the fallout of this investigation? 15 gm employees have been dismissed. more than half of them being senior executives. five others have been disciplined. essentially general motors saying there was widespread incompetence and negligence. also today general motors has raised a number of defect-related crashes to a total of 54. at least 13 deaths have been linked to the faulty switches. though we should point out, a victim compensation fund criteria has been set and that number is ultimately likely to move higher. general motors today as you look at the stock over the last year, held a conference call with analysts. they did point out there are likely to be additional recall
related charges in the second quarter, although they do not expect them to be material or substantial. that's the latest from here, back to you. >> meanwhile, those strong auto sales figures last month loomed large. phil, thank you. let's get some reaction from our guest whose are directly involved in this matter. adam levi tflt t, lead attorney in the class action lawsuit against gm. dan mcgin, ceo of mcgin and company. welcome to you both. adam, you are calling this a whitewash. >> i am. in looking at the report, the very long report that we've all spent a large part of the day reading, i think what it actually shows is a culture of negligence, recklessly and, frankly, concealment at all levels.
for the conclusion to be that some of the executives were not in the know, so to speak, when a company is doing something wrong, as the report repeatedly acknowledges, it is the company that is at fault. i'll go one step further. what was really interesting, speaking as a lawyer, the fact that the report identifies the fact that there were 300 individuals at the company who the investigator thought had knowledge of the key system defect. early on in the report, 300 custodians. the fact that 300 people at the company were aware of this, and somehow the conclusion is that some of the senior executives weren't aware, frankly, i think that's actual ly worse. i'll take that in front of a jury any day of the week. >> dan? >> i've worked with scores of ceos in crisis situations.
here's what i think today. mary barra set a new standard for accountability and candor. with respect to questions about the report, here's what i can tell you. that report has been sent to congress. it's been sent to nfsa, it's been sent to the courts. it's available to the public. it's going to be thoroughly reviewed. it is totally transparent and ultimately people will be able to decide on the merits of it. >> i'm not a lawyer, i don't play one on tv. but from my perspective, bringing back the markets to main street, i'm amazed at the resiliency of the gm brand. we had the auto bailouts we are just getting passed, now they're running into this, yet sales keep going up and up. obviously the end consumer doesn't seem too concerned about it because they keep buying gm cars. >> to carol's point, in terms of what's happening on dealer lots, why do you think that is? >> you're asking me? i couldn't hear you.
>> look. here's what i believe. consumers are really sophisticated on recalls. they're so experienced with them, they've seen them. second, these relate to cars that are not available in the marketplace today. they see good quality cars from gm and other makers but gm has made such dramatic improvements. if you look at the sales records out there, could nsumers are bu gm cars because they know they're high-quality, reliable cars. >> does that make it, adam, harder for you to build a case? >> no, because there are 2.6 million exhibits that show that there are a lot of cars that general motors produced that have serious flaws, that were hidden for years, that killed a lot of people, far more than 13 people, i can tell you that. and injured far more than 57 people. >> you can tell us that specifically? >> i can tell you that really definitively. yes. absolutely. it exceeds the 13 by a large, large margin. moreover, the serious injuries have occurred exceed the 57 as
well, and more than that, as set forth in the consumer class action cases, every purchaser of one of these cars sustained an economic loss because of the substantial diminution in value, both on purchase or right now on resale. but if i can ask one question to dan, if that's possible, because i know he's worked with a lot of the fortune 100 companies. the question that i have is, in his other experiences in crises, has he seen with any other one of his clients a level of recklessness, concealment and incompetence that comes anything close to what either miss barra said had occurred -- >> quick point. here's what gm did today. they said they'll give full authority to ken feinberg to determine the victims. they will put it in independent
hands. they want every victim who legitimate in this case to be compensated fairly. they want it decided by somebody from the outside. they're going to fund that the right way. look, it is a terrible problem. they've admitted that, but they are trying to handle this with integrity and candor and transparency. >> thank you both. got to go. a new report finds u.s. restaurant businesses fell slight areally in the first quarter. are higher food prices and the sluggish economy to blame in bobby flay will tell us what he's seeing at his restaurants next. the shocking number you will need to save up for retirement is later on the "closing bell." i always say be the man with the plan
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welcome back. rising food costs, harsh weather, jobs, of course all of these big factors when consumers are deciding when, where and how much they'll spend. so how is the consumer spending in who better to ask than chef and restauranteur bobby flay is with us here. bobby, tell us a little bit about the exposure that you have with your restaurants. you're in cities but you're also in smaller towns across the country. how are conyou sumers are spending? >> i think consumer spending is okay. i have some higher end restaurants and my check average is $60 or $70 a person. then i have my burger chain, bobby's burger palace. we have 18, going on 19 units. they're in different parts of the country. mostly along the east coast. that check averages $10 with a lot easier to sell a $10 burger meal than a higher-end meal.
but i have to say, consistently across the board people are coming out, they're coming to the restaurants and they're spending. now that said, labor costs have gone up. food costs are going through the roof in every category, whether it is meat or you name it, it is a lot harder to make a living in the restaurant business. >> how do you handle that increasing cost? do you change menu prices or try to be more efficient in terls of your operation? >> take the story of avocado. >> i really can't do that. you have to take the loss when the loss is given to you. what i try to do more than anything is make less money because i don't want to scare my customer away by taking the costs that i'm getting and passing it along. ultimately i think of this as a six-month deal, i look at it as a 20-year deal. hopefully it spreads out in the end. >> is the play with the burger
chain against that? the difference between a mcdonald's burger and a burger that has your blessing, i'm probably -- >> that's the way i look at it. you can spend a little bit more than mcdonald's but i think that the consumer across the country is a much more sophisticated eater than they were even ten years ago. we want better around we want to spend a little bit more for it. it is my job to keep it consistent and delicious. >> bobby, you really are living the american dream. a very disturbing poll came out yesterday. 6 out of of 10 americans feel like the american dream is out of reach. millennials even a higher percentage. given that you've been there, built up this empire, what words of encouragement would you give to somebody out there who had's struggling and saying i just don't think i can get to that american dream you have. >> i think the american dream is definitely attainable. i just think people have to be a little more patient than they want to be. i think the whole technological
boop boom that we've had over the last 20 years has made people want to get rich really quick. i think the american dream usually takes a little bit longer than that. as long as people are patient, put your head down and go to work. >> you said of course the $10 burger chains are doing a little better than the ones with the $60 or $70 price, but i thought it was easier in some cities like new york to cater to that luxury buyer instead of the middle guy who we keep hearing is getting hollowed out of this country. >> we're finding it easier to open more $10 burger restaurants than it is to open $70 restaurants. i just opened a restaurant in new york city three months ago. but that restaurant is brand-new and it's got a lot of of buzz so it is hard to tell what the reality is going to be. call me in a year or two. >> an accessible luxury for the consumer, it is a way of them to get a piece of bobby flay for only $10.
>> who wouldn't want that? >> i see drool forming. the dow and s&p 500 closing at record highs. is the market generating buzz. many experts say $1 million isn't enough of a retirement nest egg anymore. how much do you really need? this won't surprise you but it is probably a lot more than you think. we'll break it down for you later on the "closing bell." ♪ ♪ (man speaking chinese)
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welcome back. the s&p 500 and the dow jones industrial average today made all-time highs. the dow now hurtling towards a 17,000 mark. it wasn't long ago it was at 7,000. let's check in with allen wastler. this is consistent with what we've been talking about, right? it's actually been kind of lard to get people's attention even that the market's at record highs. >> markets at record highs. people really aren't that interested in the market. it is always a staple for us but we have all these other stories poking their heads up. one of them today did tie into market wealth. i'll tell you about that in a
minute. hot one that's burning up the last couple hours, the verizon/netflix spat. people love it when big technical companies throw spit balls at each other. >> i think a lot of people just want to watch "orange is the new black." >> maybe so. that's the number one right now. but the big ka hhuna of the day sharon epperson's piece, is $1 million enough to retire on these days. it might be. but circumstances change. retirement is always a biggie with us. people will be interested in that one. finally, i always get accused around here of throwing up the negative macro economic headlines. we got a positive one up today. net worth actually climbed according to latest figures from the fed. it's up 2%. everybody likes that story. so there. >> it is up 1 $1/2 trillion.
is aaii individual? >> the bulls are at 12-week highs. the bears are i think at 14-week lows. that's beginning to widen out again also following the markets higher. >> have a great night. monthly employment report comes out tomorrow morning. could be a historic one if the u.s. economy adds jobs. robert wolf joins me next. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours. you need to see this.
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welcome back. we got a quick "market flash" now. >> so this is on earnings. this is panera bread an the stock is moving higher in the after hours after it approved a new $600 million stock buyback program. it is a light trade, but shares up by 1.5%. company also saying that while investing in the core business remains number one priority, board's willingness to expand and refresh the repurchase program is a vote of confidence on the growth potential of panera. >> thank you, dom. as a former member of president obama's economic recovery advisory board, robert wolf will be watching the employment report tomorrow pretty closely and if the economy adds 113,000 jobs or more we will have recovered those that were lost during the great recession. joining me now, in a cnbc exclusive, founder of 32
advisors, someone who's no stranger to the white house, robert wolf. robert, welcome back. do you think we're going to get there tomorrow morning? >> i do. i think we've been averaging 175,000 over the last four years. i think we'll probably see a little uptick because the first quarter was pretty negative with weather. i think you'll see some decent productivity in the second quarter. i think if there is a surprise it is probably to the up side. >> do you think the white house -- welcomes it, talks it up, in other words? have we gotten to that point yet? can we get to that point before the mid-terms? should we expect this white house to focus on the economy and on jobs if we hit that mark? >> i think they've been focusing on the economy and jobs since day one. along with all this reform policy. but it is clear that -- i wouldn't say they're going to be jumping for joy. i think any time that you have 50-plus weeks in a row of -- 50-plus months in a row of private sector job growth is a good thing.
and if you hit the reset five years ago and you kind of are back where you are, that's a positive. but we're in a slow-growth economy around the world. u.s. is doing a little better than others but we're still at 2.5%, 3%. i would say it is not where we want to be. the president certainly wants to pass some major policies and build infrastructure, immigration reform, corporate tax reform are still things at the forefront. there is still a lot of work to do over the coming years. >> i think that that's the issue here. i'm not only not jumping for joy, i may be the one that rains on the parade. i'm the one that perhaps is raining on the parade here because we are back to where we started yet we have another 50 million or so people who have entered the workforce. laborforce participation is at an all-time low. we have a lot of rotation out of well-paying jobs into part-time jobs and lower paying jobs. i think that there really needs to be an emphasis on policies, things that spur small businesses to grow, people being
retrained. those are the kinds of policies because we are just way too far behind where we should be at this point of the recovery. >> i couldn't agree with you more. participation rate is at a 30 or 40 ha 40-year low. no question about it. what's happened in the last five years with companies to the global markets have been buoyant but certainly hasn't helped with the global economy. we still have -- china he's a little slower, india's a little slower. you see what europe did today. there's geopolitical all over the place. i think that we actually would support the president's infrastructure program which is the fastest multiplier of gdp growth and the best for job growth. i think actually we could get there faster than we all are seeing today. >> robert, peter. part of the drop in the participation rate is the 25 to 45 year-olds. that have basically dropped out of the labor force.
every month we hope that they're going to come back but they don't. do you see that continuing or is there something that's going to all of a sudden bring them back where they're out of the laborforce for good? >> i think there's certainly a concern with all of us on skilled labor, where are we getting science, technology, engineering, and math are all a concern. 70% of our engineers are trained here, and then they go back home overseas. if you talk to the labor force and technology, they're looking for people. so yeah, i would say it is a huge concern and there are gaps right now in the skills needed, and we need to kind of move that quickly. there's no quick answer. there's no magic wand to reskill labor. >> robert, before we let you go, story of top interest, what's happening with bowe bergdahl. i wonder, given that you're close to the president, whether he's -- where you think that his
being steadfast about the way his administration handled this was the right thing to do in this case? >> well, listen. i'm certainly not going to take the other side of the commander in chief, of the joint chiefs of staff dempsey who obviously supported that we leave no american soldier left behind. i'm sure you also saw general mcchrystal who ran the afghanistan surge for the country say we leave no soldier behind. and as a father of two boys, god forbid it was my son, i would say absolutely, leave no soldier behind. so i'm completely supportive of the direction of we never leave a soldier behind and i think the president is right in his approach of not apologizing for bringing a soldier back home. whether there's other things that go on, we're certainly going to have to see the facts. but it is much better to see the facts on u.s. soil than oil overseas. >> well, a happy early father's day to you. thank you for joining us. coming up, do you have enough money for retirement?
hot issues. people living longer, a million dollars not even close to what it used to be. not sufficient anymore. sharon epperson will explain how much you really need for retirement. after this. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments.
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welcome back. there are more millionaires today than ever before. but $1 million doesn't go as far as it used to. as our sharon epperson reports. sharon? >> reporter: well, kelly, having a sufficient retirement fund depends on several factors -- your having a sufficient retirement fund depends on several factors. your investment returns, health care costs. generally to retire at 65 and have that money last, you'll need a nest egg of $40,000. the median household income is between $45,000 and $60,000 which would require you to have saved over $1 million. if you live in the southeast where most of the white states are or mexico or oklahoma oklahoma you may get by with less than $1 million since the cost of living is less. but the northeast, you'll probably need at least $1.5 million or more in your retirement fund to preserve that
income. the reality is that many retirees are forced to live on less than $1 million nest egg. the median household income for those 65 or older is actually below $34,000. back to you. >> thank you, sharon. what's fascinating to me, she just showed numbers that the income goes from i think it was $58,000 to $34,000. if you want to talk about stimulating the economy, if you can close that gap and get people not to fall of a cliff when it comes to their spending, wouldn't that do wonders? >> absolutely. the federal reserve has damaged their plans for retirement because they're not getting any savings or interest on their savings. they're being forced to take aggressive risk. i wonder if sharon's numbers would change if we had a normalized interest rate environment where the
78-year-old wanted to retire in cd's can do so. but that is not according to the plan for the fed. >> that is why people like bobby flay are afraid of the stock market and invest. i hear all the time that their afraid of the stock market. you're relying then on the government and associasocial se to be there for you. >> i just got my first tuition bill from my daughter's university next year and i know i'm going to be opening restaurants for a long time. what do you do with your money? if the market stays like this forever, no problem. but we can't rely on that. if you put your money in something going to bear very little interest, can you afford to do that? >> bobby open one of your burger joints on your campus. >> i like that.
multitasking. >> two parts of this. one is that you need more money than you used to to have a reasonable retirement. the other is we know and i hate to almost put this way, but the transition is so far to 401 k plans to getting people there. >> there's an education gap as to not how people should invest in the stock market. bobby is having a hard time finding people with the work ethic to work in his restaurant. so even how to work in this economy. kids, grownups all of us need to learn better. >> think about all the guys including the former commerce secretary who started out driving a truck around for coca-cola and risen to where they are today. do you think that's a problem with today's young people? >> i go back to the word patience which is that younger people do not have the patience to work their way up the ladder. i talked to a lot of people in the restaurant business, a lot of chefs and we're all looking
for people. we can't find people to work in our restaurants. it's difficult. >> and you promote those people well, right? >> absolutely. >> send your resumes to bobby. peter, do you have a number for your retirement? >> myself? >> yes. >> i'll be watching cnbc for as long as i live. >> amazon is fighting a price war with one of the world's largest book publisher's. steven colbert has a message after this. it starts with little things. tiny changes in the brain. little things, anyone can do. it steals your memories. your independence. insures support. a breakthrough. and sooner than you'd like... ...sooner than you think.
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welcome back. we want to show you a moment from steven colbert's show. a pricing battle between amazon. i don't think he's taking amazon's side in this dispute. >> i am not the only victim here. take harry potter author jk rolling. amazon has taken the preorder buttons off her new book, "the silk worm." a vicious tactic by lord basos. i'll tell you what amazon, i
have got a package for you right here. wait a second. here it is. >> so carol, steven colbert one of the authors saying don't buy used books because every time you do -- i forget the phrase he used. >> obviously i don't want to make colbert angry. but there's something to be said about preserving some money to create good content. especially authors who aren't well known. i don't think you can use j.k. rowling as an example. to be able to preserve having the good content there has to be some level of give and take. >> this is what they wanted, right? they went after apple in the e books dispute and said any time amazon wants to lower prices,
that's great. and amazon is trying to lower prices. maybe there's a business there for authors. this is what the regulators wanted. >> i have written a bunch of cookbooks and it gets harder and harder. although there's nothing like holding a book in your hand. >> you got to hope. and it's funny to watch books get more and more crafty that way. it's almost more about just -- i don't know. that coffee table justify why i should buy this thing kind of market today. >> i still read physical newspapers. >> wow. >> bobby's books have full pictures of his wonderful food. so you can get a look at that, too. >> that's the 15th compliment for bobby's food. >> you have to understand i watch bobby's shows when i'm working out. i'm not sure if that's inspirational or mass kiss tick.
>> we're going to have a throw-down later. >> thank you for being here. "fast money" in just a few moments with melissa lee. what's on tap? >> spirit airline from a consumer perspective they might be annoying because they charge from everything. from a wall street perspective they're well loved. we got the ceo on tonight in an exclusive. >> over to you guys. >> "fast money" starts right now. live from the nasdaq market site. i'm melissa lee. our traders are here. moving the needle on microsoft. we got the analyst who upgraded the stock. he'll explain why he's excited about the company's growth prospects. the nasdaq and the russell 2,000 breaking out today to boost the economy and battle deflation. then hedge fund giant david